AD #1478 – Tesla’s Hybrid Dealer System, Camry’s Major Refresh, Hyundai to Offer U.S. Diesels?
October 14th, 2014 at 11:55am
Runtime: 7:46
- Tesla Considers Franchise Dealers
- Camry Gets Major Mid-Cycle Refresh
- Toyota Hits 7-Million Hybrid Mark
- Hyundai on U.S. Diesel Bandwagon
- Vettel Hits Paydirt
- You Said It!
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Tesla may sign up franchised dealers, Toyota tweaks the Camry, and Sebastian Vettel will make whopping big bucks.
TESLA CONSIDERS FRANCHISE DEALERS
As I noted in yesterday’s show, I interviewed Elon Musk at an industry conference on Saturday, and here’s one of the other nuggets that came out of that “fireside chat.” When I asked him if he could really scale up his retail model of company stores in all 50 states in the U.S., and how they would handle maintenance and repairs, Musk admitted that relying exclusively on company stores probably wasn’t enough. “We may need a hybrid system,” Musk said, “with a combination of our own stores and some dealer franchises.” I’m sure that franchise dealers are going to feel vindicated that their system is superior. By the way in an upcoming episode of Autoline This Week we’ll have Forrest McConnell, the chairman of the National Auto Dealer Association and he has a lot to say about Tesla’s approach.
CAMRY GETS A FACELIFT
It was three years ago when Toyota gave us the latest generation Camry, so that means it’s time for the usual mid-cycle refresh, right? Well, is it a refresh when you pretty much change everything on the outside of the car except for the roof? Is it a refresh when you give the car an all new center stack along with soft touch materials throughout? And finally, would you call adding 2,000 brand new parts to a car that’s already selling over 400,000 units in America a refresh? Well Toyota does, and says most of those changes to the 2015 model are thanks to the research it did with Camry customers. The majority said they were happy with the safety and reliability of the car, but thought it could be improved elsewhere, and Toyota was listening.
Rick Lofaso, Vehicle Marketing & Communications for Toyota sedans, trucks and SUVs: “One area they told us we had the opportunity to improve was on exterior styling and the elevation of the interior appointments. So that was the focus area for this mid-cycle change. Now one of the things I’ll add to that, us along with the manufacturers periodically change the product mid-cycle. But that’s usually very very limited to color palates, wheels, fabrics, not the kind of design changes you see with this car. To our knowledge, this is the most that any manufacturer has ever devoted to a mid-cycle change in the business. And that really goes to show how committed we are to making sure that Camry continues satisfy our customers and how important it is to our brand.”
Well, if you want to see that customer-driven Camry up close, it’s in dealerships now. We’ll have a more in-depth look at the car on a future episode of Autoline DAILY.
7 MILLION HYBRIDS
Talk about Toyota, the company just announced it’s sold 7 million hybrids globally, including Lexus. That’s an impressive number but it took 17 years to hit that mark. Not surprisingly, the Prius accounts for nearly half of those sales. Toyota currently sells 27 different hybrid models globally and will introduce 15 more. But as we’ve reported all year, hybrid sales are falling in the U.S. which leads us to our next story.
HYUNDAI ON U.S. DIESEL BANDWAGON
With hybrid sales softening, Hyundai is considering offering diesels in the U.S.—again. It had considered them a few years ago but backed away mainly due to cost considerations. But now Hyundai tells Ward’s that it sees value in the engine, but the key will be finding the right vehicle to drop it in.
VETTEL HITS PAYDIRT
Wipe those tears away Lebron. Pull out your hanky Kobe. Move aside Tiger. As much as those guys earn in a year, they’re not even close to what Formula One driver Sebastian Vettel is reportedly going to get for moving to Ferrari. Forbes is reporting that Seb signed a contract worth $80 million smackaroos a year. And that does not include sponsorship deals that could push the number much higher. Forbes says Vettel is now the highest salary athlete in the world.
Coming up next, it’s time for You Said It!
C-Tech saw our report that one of the richest men in the world wants to buy up a dealership group, but wonders: “If dealers make such slim profits why would W. Buffet want to buy the Van Tuyl Group? High return on investment. My prediction is Berkshire Hathaway Automotive will be buying more dealers in the future. Look out Autonation and Sonic.” Interesting viewpoint, C-Tech. Maybe all this dealership consolidation we’ve seen so far is only a drop in the bucket, and there’s going to be a lot more to come. I hadn’t thought about that possibility, so thanks for sharing that.
HtG wants to know: “Why isn’t Tesla fighting the dealers at the Federal level? It’s hard to believe Musk hasn’t had lawyers look at this route. Going state by state takes so long and must be expensive.” It’s the only way you can do it. There is no federal protection for dealer franchisees. Each and every one of the 50 states have written their own franchise laws. The NADA did this deliberately over 60 years ago, so that dealers would have local political support in every state.
donfromnaples heard about the ALG survey which says car buyers perception of Kia is not very good. He wants to know: “If Kia were doing so badly based on consumer perceptions as indicated in this article, then how is it that Kia sales have skyrocketed during the past 3 model years?” Well, obviously they’re being bought by people who don’t have a bad perception of Kia!
HelicopterJay saw our report on the hydraulic hybrid that Peugeot showed at the Paris auto show but wants to know: “John, I love the idea of the Hydraulic Hybrid system, but where is it? To date I have seen only 1 UPS truck with “Hydraulic Hybrid” printed on it.” Yep, they’re pretty slow in coming. But my friends at GM say check out a company called Lightning Hybrids. The GM truck guys seem to like what they see there.
As always we really like reading your comments and questions so keep them coming.
And don’t forget to join us for Autoline After Hours on Thursday. We’ll have Mat Haggart, the chief engineer on the Acura TLX. He’ll have the car in the studio with him, so you won’t want to miss it. I think the TLX represents a turning point for the Acura brand.
Anyway, that wraps up today’s report. Thanks for watching, we’ll see you tomorrow.
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Comments (37)
October 14th, 2014 at 12:16 pm
“Hyundai on the US diesel bandwagon”.The more,the merrier I say.Now…wil Hyundai or Kia bring over a compact diesel pickup? I know they have them.
October 14th, 2014 at 12:45 pm
If Hyundai does a diesel Elantra and Forte hatch and sedan, VW will really be in trouble. Those would be direct competition to VW’s TDI Jetta, Golf, and Jetta wagon which are among VW’s best selling products.
October 14th, 2014 at 12:49 pm
I find that the 2015 Camry looks like a dumbed down version of the Lexus ES300 especially with that feeble attempt to emulate the Lexus Spindle Grill. Why did the people at Toyota bother? There was nothing wrong with the previous sheet metal, nose and tail on the Camry. The interior and under the hood is were they should always put the money.
October 14th, 2014 at 12:51 pm
One vehicle brand which is always recognizable is the Land Rover / Range Rover Brand. Those vehicles withstand the test of time. The same was once said about Volvo and Saab. I can not wait to drive the new Range Rover Discovery Sport due out in Early 2015.
October 14th, 2014 at 12:53 pm
The typical Toyota Camry and Corolla buyers could care less what ‘s under the hood, only that it is quiet, comfortable and reliable. I have spoken to a couple of recent Corolla buyers and they could not tell me if theirs had a CVT or traditional automatic, nor did they care!
October 14th, 2014 at 12:56 pm
On the Camry refresh:
Toyota, WHAT ARE YOU DOING?!!!?
For AGES the Lexus ES has been dogged by cosmetic similarities to its kissing cousin, the Camry. Everyone and their mother derides the choice of anyone to pay good money for an ES when the Camry could be had for so much less and was styled so similarly.
Then, with the advent of the new Spindle grille, the Lexus nameplate finally managed to ween itself off of mother Toyota’s breast milk.
And now you go and pull a stunt like this? Giving the Camry a Spindle-esk grille to mimic the luxury brand that still hasn’t fully recovered from years of ridicule because of it’s cosmetic similarities to you???
C’mon’ Toyota!
October 14th, 2014 at 1:01 pm
Elon Musk will have his hands full with the new Models “D” and “X” once they hit the market, not to mention his involvement with Space X.
Maybe Warren Buffet is setting Berkshire Hathaway up in the Auto Dealer Franchise Business to begin a takeover of a majority portion of the Luxury and Near Luxury Markets which would include Tesla.
I have got to believe Warren Buffet wants Berkshire Hathaway to be in a prime position once the Tesla’s of the world and those automotive brands from China hit the US Market.
October 14th, 2014 at 1:16 pm
Toyota – It “sounds” like you are doing the right thing, I am curious to see the interior changes on the new Camry.
Hyudai – Diesel..Put it in a compact truck and that baby will sell!! Create a true wagon with it too.
October 14th, 2014 at 1:23 pm
Vettel Vests
If you think Ferrari are the ones paying Vettel’s retainer, consider the dysfunction that is F1. It’s a staggeringly deep hole that series has dug itself into.
October 14th, 2014 at 1:29 pm
#3, right on, that grill is a wart on an otherwise great looking sedan, especially the black lower part.. I wonder if they made that lower part the same color as the car if it would look a lot better…
Also, concerning the diesel…Yes, Yes, Yes, and a truly small pickup to go with it!!!!
October 14th, 2014 at 1:43 pm
10, I’m sure some people will paint the lower part body color, both thinking it will look better, and just to make it different.
Still, as Pedro said, the thing Camry buyers care about is that the car is quiet, comfortable, and reliable. I’m sure they will appreciate an improved interior, but most won’t care much about what the nose of the car looks like, one way or the other.
The ES started out as the best selling Lexus product, but for years, the RX crossover has been their top seller, and they probably aren’t worried if they lose a few ES sales to a Camry that looks a little more like it. Actually, the current ES is more a “stretch” Camry, AKA Avalon.
October 14th, 2014 at 2:18 pm
From the Department of WTF?
Niki Lauda says today’s F1 cars are too easy to drive. They are ‘bullshit’
http://www.motorsport.com/f1/video/main-gallery/niki-lauda-modern-f1-cars-are-bullshit/
Does Niki really work for Mercedes, the new constructors champion?
October 14th, 2014 at 2:32 pm
I think that if they could replicate the performance and general characteristics of the 1967 GP cars without them being deathtraps, they would be quite popular with the fans.
October 14th, 2014 at 2:37 pm
TTAC has a piece on the difference between the US Camry and the one they get in Europe, the latter has a more upscale, attractive front and rear.
October 14th, 2014 at 2:59 pm
So is Toyota making a mistake by sharing the grill of the Lexus (with the Camry), and will it help/hurt either Toyota or Lexus. Never a fan of the ‘spindle’, personally, I think it a mistake. GM sure took a lot of heat for ‘their’ sharing of design (or is Toyota, the ‘Teflon brand’, immune to ‘mis-deed’).
October 14th, 2014 at 3:04 pm
12, F1 cars should have 6-speed manual transmissions with 3 pedals.
October 14th, 2014 at 3:08 pm
#15
Toyota isn’t Teflon coated. GM was the worse at Badge Engineering. They may be doing it fine now, but for decades GM established themselves as the paradigm of how not to do it. GM may never wash themselves of that speaking point.
Yes, Lexus/Toyota share parts, but I haven’t seen two equivalent models next to each other. IMO there is still a distinct difference in appearance.
I do remember one item that made me laugh with Toyota/Lexus. Remember when ES300 always came with two tone colors. The bottom 6″ was a different color. That eventually became an option on late 90s Camrys. I guess in an attempt to make Toyota owners feel more Lexus.
October 14th, 2014 at 3:08 pm
16 The same reason baseball is played with wooden bats, not aluminum. I think racing is fundamentally flawed, as a sport. It’s more of a business.
October 14th, 2014 at 3:24 pm
I’m calling BS on Lauda’s statement of F1 being “too easy to drive”; the ‘edge’ is so much sharper then ‘in the day’ of Lauda. As the saying goes, “walk in the other man’s moccasins” before making such a statement. There is certainly more going on in today’s cars (than in yesteryear’s; just look at the steering wheel controls) though they both had their own unique challenges. JMO
October 14th, 2014 at 3:33 pm
19, I figure they were too easy to drive when they had automatic launch control, ABS, and stability control, but I doubt they are “easy” to drive now, except for the lack of a left pedal. Now, that at least have to shift with paddles, rather than being automatic. Weren’t they automatic for a while?
October 14th, 2014 at 3:54 pm
20 I think in the early 00′s the transmissions were automatic. If you read James Allen’s book on Schumacher, he implies Ferrari had illegal launch control at some point to help Schumi, for whom starts were a weakness. Now everyone has launch control, traction, electronic braking, electric diff, etc. It’s complex, sure. I’m prolly just a dinosaur.
I wonder what the sport will look like in ten years. I still like reading the intrigue and following races via radio.
October 14th, 2014 at 5:22 pm
Thanks for the good news on Hyundai/Kia bringing their diesel engine to America! It would seem fitting to put the engine in the Sonata, Elantra , and Genesis , oh maybe the Santa Fe too! I love Hyundai cars, and diesel engines, what a winning combination- now let’s get started building them!! James L.
October 14th, 2014 at 5:31 pm
Do you fellers believe Hyundai would be taking a big risk by offering a small pickup in North America? If it doesn’t pan out, it would be a lot of wasted money on R&D.
October 14th, 2014 at 5:58 pm
Adding a diesel into the Hyu./Kia mix sounds like a good idea, but, given the fact that fuel prices are declining, how can the extra cost of a diesel be justified in any of their low priced units… that is without only offering a diesel in a loaded vehicle. At present, it would take a very long time to break even.
October 14th, 2014 at 6:00 pm
23, I’d think they would do very well with a small pickup, like S-10 size, if they priced it right. They even have existing assembly plants in the U.S. where they could build it, and avoid the “chicken tax.”
October 14th, 2014 at 6:09 pm
@21 – Launch control and traction control are illegal in F1 these days to try to bring out the best drivers with the best skills.
October 14th, 2014 at 6:10 pm
And related to the coming Korean diesels and others going though a cycle refresh….it may be bad timing; just like the Fiat/Chry’s NYSE offerings. I say this because in many of the investment areas the stocks have experienced the 200 day running average decline. Not only is this a US delema, but the result of the added problems in the EU (Germany, Spain,etal)and China. As you should be aware, its not a good time to hold onto stocks. The market is in panic!
October 14th, 2014 at 6:13 pm
If you were going to replicate a Ear of F1 I’d say do the 71-76 cars. Those looked like race cars. Huge tires, Huge wings, Huge air boxes , Engines that made a lovely noise. No driver aids , No ground effects, No paddle shifts , no carbon brakes. Make the cars from the carbon fiber tubs and suspension parts of today, with all the safety protections that have been learned in 40 years. Do all the above and people would be in love with F1 again. I want to see a driver wrestle a car through the turns ,actually be able to out brake another without having to resort to punting them off or passing them in the pits. I want to see cars that can actually pass one another. You know real racing.
October 14th, 2014 at 6:26 pm
With diesel cars, like VW TDI’s and Benz E250d, you get about 30% better mpg than the gas equivalent, but on fuel that costs about 10% more, at least where I am. The same would hold true with diesel SUV/CUV’s. By the time you pay the premium for the engine and buy the urea stuff, the payback will be very long for most people.
Some people just “like” diesels, and I liked the 1.9 TDI Jetta wagon I had for a while, but when reality sets in, diesels, except for HD pickups used for heavy towing, will be a small niche for the forseeable future.
October 14th, 2014 at 7:17 pm
Kit, For in as much as I like diesels,esp. in small or mid-sized P/U’s,they just cannot be justified and be profitable as of this time. I would consider a new Colorado diesel(for the torque) when I invest in a 20-22 ft. fish’in boat. But then I have to ask if it wouldn’t be cheaper to pay to have the boat hauled twice a year during the season or borrow a p/u from a pal or relative. Why aren’t decisions simple anymore?
October 15th, 2014 at 9:35 am
No wings. Minimum radius for undercarriage cross-section. Bias ply, treaded tires.
October 15th, 2014 at 10:22 am
I’d watch that. Gordon Murray suggested getting rid of wings so cars could follow each other, and keep the ground effects.
This is why historics racing is getting more popular. Bernie will have to find a way to get over
October 15th, 2014 at 11:13 am
Well, if you are waxing hypothetical (on F1 rules), okay, go ahead. But with a rule book that probably looks like an encyclopedia, a couple of lines of extra rule or exclusion of rule is just myopic; I (still) think F1 is doing a pretty good job in putting on their show; though a couple of meathead rules suggestions recently, which have been either nixed or modified, might lead one to think differently. (I have in mind the drag-race start after a safety car and the no communication for driver aids via radio; glad they didn’t get too far (with those).
October 15th, 2014 at 11:22 am
Did F1 keep the thing with double points for the last race?
October 15th, 2014 at 11:40 am
33 it’s those bonehead ideas that make me wonder if Charlie is past his sell by date. Does he understand modern cars?
Yes, still Double Dhabi
October 16th, 2014 at 8:58 am
I wish you’d return to your previous page format. I can’t get the ‘Show transcript’ link to work and have tried two different browsers. Why change in the first place?
October 16th, 2014 at 11:54 am
Tesla considers franchise dealerships?
Whenever you start a Company, you look to the success or failures of other companies in your business and learn from their successes and their failures.
Ford attempted to show franchise dealerships that consolidation of stores and having the factory run them was the answer to having franchised Dealerships in Salt Lake City and a few other spots.
They spent millions to prove their point and they failed miserably and sold back all of the dealerships at huge losses.
Franchise dealerships provide the motivation to succeed and the motivation for manufacturers to change. Without them, change would be slow. Secondly, in most franchises you have maybe 40% of the product as hot and the rest is what is called pushed inventory. In order to push that inventory, dealerships must invest more money in advertising, invest more in trade ins and as for more favors from their finance sources.
A franchised dealership when managed properly and with all departments functioning at a high level can not be beat by any Company store in any location.
Tesla should spend 100% on the product and 0% on trying to get around using franchised dealerships to market their product.